New Economics Papers
on Agricultural Economics
Issue of 2005‒09‒11
twelve papers chosen by

  1. Production and Technical Efficiency on Australian Dairy Farms By Tom Kompas; Tuong Nhu Che
  2. Market Reform, Productivity and Efficiency in Vietnamese Rice Production By Tom Kompas
  3. Conservation Reserve Program in the Presence of a Working Land Alternative: Implications for Environmental Quality, Program Participation, and Income Transfer, The By Feng, Hongli; Kling, Catherine L.; Kurkalova, Lyubov A.; Secchi, Silvia; Gassman, Philip W.
  4. Non-agricultural land use and land reform: theory and evidence from Brazil By Juliano Junqueira Assunção
  5. Are Agricultural Extension Packages What Ethiopian Farmers Want? A Stated Preference Analysis By Carlsson, Fredrik; Köhlin, Gunnar; Mekonnen, Alemu; Yesuf, Mahmud
  6. Testing competing explanations for the inverse productivity puzzle By Juliano Junqueira Assunção; Luiz Henrique Braido
  7. The impact of gurus : Parker grades and en primeur wine prices By Héla Hadj Ali; Sébastien Lecocq; Michael Visser
  8. Case Study of China’s Commercial Pork Value Chain, A By Fabiosa, Jacinto F.; Hu, Dinghuan; Fang, Cheng
  9. Sweet land or Sweat land: Two proposals for facilitating access to land and adjustment to eroding EU sugar preferences in Fiji By Satish Chand
  10. A Practical Optimal Quarantine Measure By Tom Kompas; Tuong Nhu Che
  11. Why Does the Average Price of Tuna Fall During Lent? By Aviv Nevo; Konstantinos Hatzitaskos
  12. The Impact on Nutrition of the Intrahousehold Distribution of Power By Habiba Djebbari

  1. By: Tom Kompas (Australian Bureau of Agricultural and Resource Economics); Tuong Nhu Che (Australian Bureau of Agricultural and Resource Economics Canberra, ACT)
    Abstract: The dairy industry plays an important role in both Australia and the world dairy market. Domestically, it is one of the most important agricultural industries, valued at $A3.7 billion a year. Internationally, the industry exports more than $A3 billion a year, making Australia the third largest dairy exporter in the world. Using traditional farm survey input and output data and a unique biannual data set on farm technology use, this paper estimates a stochastic production frontier and technical efficiency model for Australian dairy farms, determining the relative importance of each input in dairy production, the quantitative effects of key technology variables on farm efficiency and overall farm profiles based on the efficiency rankings of dairy producers. Estimated results show that production exhibits constant returns to scale and although feed concentration and the number of cows milked at peak season matter, the key determinants of differences in dairy farm efficiency are the type of dairy shed used and the proportion of irrigated farm area. Overall farm profiles also indicate that those in the high efficiency group employ either rotary or swingover dairy shed technology and have (by far) the largest proportion of land under irrigation.
    Keywords: dairy industry, agriculture, technical efficiency model
    JEL: D21 D23 G14
    Date: 2004–01
  2. By: Tom Kompas (Asia Pacific School of Economics and Government,Australian National University.)
    Abstract: This paper analyzes the dramatic increases in rice output and productivity in Vietnam due largely to market reform, inducing farmers to work harder and use land more efficiently. The reform process is captured through changes in effort variables and a decomposition of total factor productivity (TFP) due to enhanced incentives for two main reform periods: output contracts (1981-87) and trade liberalization (1988-94). The results show that the more extensive is market reform the larger the increase in TFP and the share of TFP growth due to incentive effects, suggesting that more competitive markets and secure property rights matter greatly. However, in the post-reform period (1995-99), the incentive component of TFP dissipates as a result of falls in the price of rice and slow increases in input prices, especially for hired labour, fertilizer and capital. A stochastic production frontier is estimated to determine what farm-specific factors limit efficiency gains. Results show that farms in the main rice growing regions, those with larger farm size and farms with a higher proportion of rice land ploughed by tractor are more efficient, suggesting the need for additional reforms to augment productvity. In particular, the requirement that rice be grown in every province in Vietnam, restrictions on farm size (especially in the north) and the slow development of rural credit markets for capital and land are seen to restrict the level and growth of efficiency substantially.
    Keywords: market reform, total factor productivity, efficiency, rice production
    JEL: O13 O47 Q10
    Date: 2004–04
  3. By: Feng, Hongli; Kling, Catherine L.; Kurkalova, Lyubov A.; Secchi, Silvia; Gassman, Philip W.
    Abstract: The United States has invested large sums of resources in multiple conservation programs for agriculture over the past century. In this paper we focus on the impacts of program interactions. Specifically, using an integrated economic and bio-physical modeling framework, we consider the impacts of the presence of working land programs on a land retirement for an important agricultural region—the Upper Mississippi River Basin (UMRB). Compared to a land retirement only program, we find that the presence of a working land program for conservation tillage results in significantly lower predicted signups for land retirement at a given rental rate. We also find that the presence of both a large working land and land retirement program can result in more environmental benefits and income transfers than a land retirement only program can achieve.
    Keywords: Conservation Reserve Program, conservation tillage, environmental quality, income transfer, working land programs.
    Date: 2005–09–01
  4. By: Juliano Junqueira Assunção (Department of Economics PUC-Rio)
    Abstract: This paper examines the effect of nonagricultural land use on agrarian organization and land reform, providing a simple model to determine its policy implications and some evidence on its importance. It is argued that, if land-rental market is imperfect, there is a role for redistributive land policies and the following implications hold: (i) land reform is more probable to enhance efficiency in a low-wage economy; (ii) such policies should aim small farmers instead of landless people, obtaining land from large landholders. Empirical evidence suggests this is a relevant issue in Brazil, specially during periods of high macroeconomic instability.
    Keywords: land reform; land use; agricultural development
    Date: 2005–02
  5. By: Carlsson, Fredrik (Department of Economics, School of Economics and Commercial Law, Göteborg University); Köhlin, Gunnar (Department of Economics, School of Economics and Commercial Law, Göteborg University); Mekonnen, Alemu (Department of Economics, Addis Ababa University, Ethiopia; and Environmental Economics Policy Forum); Yesuf, Mahmud (Environmental Economics Policy Forum, Ethiopian Development Research Institute, Ethiopia)
    Abstract: There is an evident dichotomy in many rural development policies in the world between extension driven adoption of modern inputs and community driven local public goods. However, the target populations of these policies seldom have the possibility to express their preference between these two policies. In this paper we report the results of a stated preference survey in the highlands of Ethiopia where the farmers are given a choice between an agricultural extension package and a local public good - health care or protected spring. The study finds that a majority of people prefers the public good. However, when the extension package is combined with insurance in terms of no payback of the credit in case of crop loss, then we find a significant increase in the choice of the extension package. The study thus sheds light on why Ethiopia’s major development strategy has had limited success and gives evidence of how stated preference methodologies can be utilized for development policy design. <p>
    Keywords: Agricultural extension; choice experiment; local public goods; Ethiopia; Africa
    JEL: D13 H41 H43 O13
    Date: 2005–08–17
  6. By: Juliano Junqueira Assunção (Department of Economics PUC-Rio); Luiz Henrique Braido (EPGE/FGV)
    Abstract: We use plot-level data from ICRISAT to assess competing explanations for an old empirical regularity - the inverse relationship between land productivity and farm size. The presence of farmers who simultaneously crop multiple plots with di¤erent sizes is used to test (and reject) explanations based on household heterogeneity. The panel nature of the data is explored to test (and refuse) explanations based on plot fixed characteristics. We are then left with explanations based on time-varying plot features or measurement errors in the plot size. Theoretically, the input choices should reflect both plot-specific features and the true plot size. Empirically, the inverse relationship vanishes when we control for input use.
    Keywords: Development, farm size, productivity.
    Date: 2005–02
  7. By: Héla Hadj Ali; Sébastien Lecocq; Michael Visser
    Abstract: The purpose of this paper is to measure the impact of Robert Parker's oenological grades on Bordeaux wine prices. We study their impact on the so-called en primeur wine prices, i.e., the prices determined by the ch^ateau owners when the wines are still extremely young. The Parker grades are usually published in the spring of each year, before the wine prices are established. However, the wine grades attributed in 2003 have been published much later, in the autumn, after the determination of the prices. This unusual reversal is exploited to estimate a Parker effect. We find that, on average, the effect is equal to 2.80 euros per bottle of wine. We also estimate grade-specific effects, and use these estimates to predict what the prices would have been had Parker attended the spring tasting in 2003.
    Keywords: expert opinion, natural experiment, treatment effect, Bordeaux wine price
    JEL: C21 D89 L15
    Date: 2005–09
  8. By: Fabiosa, Jacinto F.; Hu, Dinghuan; Fang, Cheng
    Abstract: In China, with the cost of improved technology rising, surplus labor shrinking, and demand for food quality and safety increasing, it will be just a matter of time before the country’s hog production sector will be commercialized like that of developed countries. However, even if China’s cost of production converges to international levels, as shown in this case study, China may continue to retain some competitive advantage because of the labor-intensive nature of the marketing services involved in hog processing and meat distribution. The supply of variety meats offers the most promising market opportunity for foreign suppliers in China. The market may open further if the tariff rate for variety meats is reduced from 20% and harmonized with the pork muscle meat rate of 12%, and if the value-added tax of 13% is applied equally to both imported and domestic products. The fast-growing Western-style family restaurant and higher-end dining sector is another market opportunity for high-quality imported pork.
    Keywords: commercial, cost structure, imports, pork value chain.
    Date: 2005–08–23
  9. By: Satish Chand (Asia Pacific School of Economics and Government, Australian National University)
    Abstract: The resolution of problems with lease renewals in Fiji, particularly in the sugarcane districts, has ramifications for private investment and growth in the entire economy. The impending withdrawal of subsidies to sugar as world trade is liberalised has increased the urgency of finding solutions to these problems. This paper draws on game theory to characterise the problems facing the Fiji sugar industry. The incentives for land and ethnic politics are identified. Separate proposals are put forward to facilitate secure access to land and to minimise adjustment costs from the erosion of preferences under the Sugar Protocol. The rationalisation forced upon the sugar industry, if managed well, could induce land reforms that could improve the investment climate and the prospects for growth, whilst minimising pains of adjustment.
    Keywords: Fiji, access to land, EU, Sugar, European Union, economic growth, private investment, game theory, rationalisation
    JEL: C70 O13 H71
    Date: 2004–06
  10. By: Tom Kompas (Asia Pacific School of Economics and Management, Australian National University); Tuong Nhu Che (Australian Bureau of Agricultural and Resource Economics, Canberra)
    Abstract: Quarantine programs have generally provided an essential protection against the importation of exotic diseases, thus protecting both consumers and producers from major health concerns and pests and diseases that can potentially destroy local agricultural production. However, quarantine measures also impose costs in the form of expenditures on the quarantine program itself and the welfare losses that are associated with such trade restrictions. This paper develops a simple model to determine the optimal level of quarantine activity for imported livestock by minimizing the present-value of the direct costs of the disease, the cost of the quarantine program and any resulting welfare losses. The result defines a practical measure for the optimal number of infected livestock that may potentially enter a region in a given year. The model is then applied to the case of Ovine Johne’s Disease and its potential entry to the sheep industry in Western Australia. All key parameter values are subject to random variation and the optimal solution and sensitivity measures are obtained with a genetic algorithm.
    Keywords: Quarantine measures, Ovine Johne’s Disease, agricultural policy
    JEL: Q17 Q28 R59
    Date: 2004–01
  11. By: Aviv Nevo; Konstantinos Hatzitaskos
    Abstract: For many products the average price paid by consumers falls during periods of high demand. We use information from a large supermarket chain to decompose the decrease in the average price into a substitution effect, due to an increase in the share of cheaper products, and a price reduction effect. We find that for almost all the products we study the substitution effect explains a large part of the decrease. We estimate demand for these products and show the price declines are consistent with a change in demand elasticity and the relative demand for different brands. Our findings are less consistent with "loss-leader" models of retail competition.
    Date: 2005–08
  12. By: Habiba Djebbari (Université Laval, CIRPÉE and IZA Bonn)
    Abstract: The distribution of income within the household is found to matter for the allocation of resources towards nutrition. Rural Mexican households do not pool income, nor do they attain a Pareto-efficient allocation of resources. In contrast to what is commonly done in the literature, I do not assume that only the head of household and his wife share the decisionmaking. In particular, I present a new test of the unitary model in the context of extended families, which acknowledges that any household member may participate to the decisionmaking as long as he or she earns some income. I find that a change in the number of income earners is associated with a change in food calorie consumption controlling for the change in household size and household income. Both the number and identities of income earners matter in the extended family. In particular, when a female household member starts earning income, food consumption increases substantively. When it is a male household member who starts earning income, it decreases substantively.
    Keywords: nutrition, intrahousehold allocation, extended families
    JEL: I12 D13 I38
    Date: 2005–07

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